The O&C Act of 1937 set aside approximately 2.4
million acres of federally-owned forest lands in 18 western
Oregon counties for the economic benefit of those counties.

The lands were originally granted to the Oregon
and California Railroad Company by the federal government in
the 1860's to encourage development in western Oregon.

When the railroad failed to meet its obligations
to sell the land to settlers, the government took back the
land in 1916. The 1937 legislation was passed by
Congress to compensate counties for being deprived of
property tax revenues and a privately-owned land base for
economic development.

According to section 1181a of the O&C Act, O&C
timberlands are to be managed for "permanent forest
production" with timber to be "sold, cut and removed in
conformity with the principal [sic] of sustained yield for
the purpose of providing a permanent source of timber
supply, protecting watersheds, regulating stream flow and
contributing to the economic stability of local communities
and industries, and providing recreational facilities."

Sustained yield forestry has worked well on the
O&C lands. In 1937, the softwood inventory was
estimated to be about 44 billion board feet. After
more than 60 years of timber harvest and wise management,
the softwood inventory is estimated to be about 60 billion
board feet.

The 50 percent of total receipts paid to the
counties form an essential part of county budgets, helping
to pay for health and social services, law enforcement,
corrections programs and many other public services.
The quality of life in the O&C counties would diminish
without the benefits made possible by O&C revenues.

The O&C Act directs that 75 percent of receipts
from the sale of timber be distributed to the 18 O&C
counties. Over the years, the counties voluntarily
returned one-third of their entitlement to be plowed back
into the management of the lands. These plow-back
funds, with a present value exceeding $2.0 billion, have
helped pay for reforestation, road construction and
maintenance, campgrounds, recreational facilities and other
improvements on the land.